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ALIT vs. PYCR: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Internet - Software stocks have likely encountered both Alight, Inc. (ALIT - Free Report) and Paycor HCM, Inc. (PYCR - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Currently, Alight, Inc. has a Zacks Rank of #2 (Buy), while Paycor HCM, Inc. has a Zacks Rank of #3 (Hold). This means that ALIT's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

ALIT currently has a forward P/E ratio of 12.22, while PYCR has a forward P/E of 36.08. We also note that ALIT has a PEG ratio of 1.19. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. PYCR currently has a PEG ratio of 1.76.

Another notable valuation metric for ALIT is its P/B ratio of 1.05. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, PYCR has a P/B of 2.38.

These are just a few of the metrics contributing to ALIT's Value grade of B and PYCR's Value grade of F.

ALIT is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that ALIT is likely the superior value option right now.


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